COMPENSATORY AWARD

Gover and others v Propertycare Ltd: [2006] EWCA Civ 286

CA: Buxton, Lloyds and Richards LJJ: 28 March 2006

The claimants worked as sales agents for the respondent company. Following changes relating to the rate of their commission, unilaterally introduced by the company, the claimants resigned. On their claims of unfair dismissal, the employment tribunal found that the company had thereby repudiated the terms of the claimants' contracts of employment and that the claimants had been unfairly dismissed. In assessing the compensatory award, the tribunal held that, even if the company had properly consulted the claimants and proposed terms that were reasonable in the sense of not being repudiatory, the claimants would not have accepted them and that, therefore, the loss suffered by the claimants as a result of the company's fault was limited to their earnings during the period when consultation should have taken place, which the tribunal found to be four months, and two weeks' notice. An appeal by the claimants, against the amount of the award, was dismissed by the Employment Appeal Tribunal.

The claimants appealed and sought at the hearing of the appeal to introduce a new ground of appeal, namely that it was not open the employment tribunal to consider whether the respondent company could have subsequently dismissed the claimants fairly for a reason that was different from that of the actual dismissal.

The Court of Appeal held:
(1) Under section 37(1) of the Employment Tribunals Act 1996 the jurisdiction of the Court of Appeal was to hear an appeal "from" the Employment Appeal Tribunal and the court could not in any realistic sense be said to do so if it concerned itself only with whether the decision of the employment tribunal was right. It was not, therefore, irrelevant that the claimants' new ground of appeal had not been taken before the appeal tribunal. In any event, the jurisdiction of the court was constrained by what was in the grounds of appeal and in the grant of permission to appeal, and it was clear that, not only was the point not taken in the grounds of appeal, but also it had not been in issue when permission to appeal was granted, and no permission had been sought to amend. Accordingly, the claimants would not be allowed to pursue the new ground of appeal.

(2) In assessing the claimants' loss under section 123(1) of the Employment Rights Act 1996, the employment tribunal had to decide whether the unfair departure from what should have happened was of a kind that made it possible to say that the failure had made no difference, and an appellate court had to tread very warily when asked to substitute its own impression for that of the tribunal. As the appeal tribunal found, the employment tribunal had approached its task correctly and made findings based on a careful analysis of the material before it.

Per curiam. The principle recognised in Polkey v A E Dayton Services Ltd—whereby if the employment tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment—is not so limited that it is only open to a tribunal where the employer had a valid reason for dismissal but had acted unfairly in his mode of reliance on that reason and the hypothesised future and fair dismissal would have been for that same reason. The principle is merely an example of the general application of the requirements of section 123(1) of the Employment Rights Act 1996.

The appeal was dismissed.

Appearances: John Cavanagh QC and Martin Budworth (Horwich Farrelly, Manchester) for the claimants; John Bowers QC and Mark Trafford (HomeLet Legal Services, Lincoln) for the respondent company.